Mortgage 2nd house

Irvine90

Hi, I have a house with £3,500 left to pay on the mortgage and hope to clear this soon, i am looking to buy a second home to live in and let my parents live in the first house, new house would be £90k - £105k original house worth £150k, do i look at remortgaging the old house to buy the new or just take a mortgage out on the new one.

kingstreet

The current one, or both? Depends on the values concerned...

Where is the deposit coming from if you mortgage only the new property?

Irvine90

I could probably save 10% deposit for the new house.
would i get a better rate if i used the value of the first house to buy the 2nd or would i be better keeping them separate.
1st house value £150k
2nd value £90k-105k

kingstreet

Probably the best option is two mortgages, both fee-free, preferably with cashbacks on completion where you borrow less than 60% of the purchase price/value.

In that way, you limit the initial costs and get the better rates due to the lower loans to value.

Get broker help with this to maximise your savings.

If your parents will live in one of the properties you are going to need to prove affordability for both mortgages as one will be classed as for a dependent relative and not as a "let to buy" which would be based on the estimated rental income.